The BOT points out that the debt of vulnerable households needs to be restructured rather than reduced interest.

The Governor of the BOT pointed out that the debt of vulnerable households must be restructured rather than reduce interest rates. It is not necessary to reduce it, but consider the economic outlook, inflation, and financial stability. Welcome to the discussion. Minister of Finance and Minister of Commerce Mr. Sethaput Sutthiwatanaruput, Governor of the Bank of Thailand (BOT), presided over the opening of the BOT Symposium 2024 "Debt: The Economics of Balancing Today and Tomorrow". Increase from 50% to 90% of GDP In the past 20 years, this has not only been caused by overspending. It is also caused by the fact that the people do not have enough income. People have no choice but to rely on credit and may borrow more than they can afford if financial institutions fail to assess the real risks. Meanwhile, the policies of governments in all eras focus on providing short-term assistance. When asked whether the policy interest rate reduction will help solve the problem of household debt. Mr. Sethaput According t o the Ministry of Finance, the reduction in interest rates may reduce the burden of old debts, but it is also necessary to consider whether reducing interest rates will also lead to faster growth of new loans. Both sides must be weighed. In addition, there is fixed-interest debt, and it is expected that the Bank of Thailand will reduce the policy interest rate and everyone's debt burden will be reduced. In the case of a debt haircut measure, Long-term care is required and in the right place. However, it is the BOT's duty to implement policies to solve long-term problems in a sustainable manner. administrator The BOT also mentioned that the US Federal Reserve (Fed) cut the policy rate by 0.50%, which is considered not to have much impact on the Thai economy. However, the most affected are the strengthening of the baht due to the weakening of the dollar and the all-time high of gold prices. The BOT continues to consider the adjustment of interest rate policy (Outlook Dependent) mainly on three factors: economi c outlook; Currently, the economic outlook and inflation rate are still close to expectations. As for financial stability, it is found that credit risk has increased, which is a factor that still needs to be considered. In the economic recovery that is K Shape. "Interest rates are one of the monetary policy tools, and the BOT uses a policy mix policy, which considers that reducing the interest burden on vulnerable groups may not have as much of an effect as debt restructuring." Mr. Sethaput said. As for the strong baht. It was found that from the beginning of the year until now, it has appreciated by 3.4%, which is not only Thailand but also other countries that have strengthened as well, such as Malaysia, the strong baht is caused by the weakening of the US dollar, the Fed has cut interest rates, which is in line with the market mechanism, but what we do not want to see is that the baht fluctuates too much caused by factors other than fundamentals, which the BOT is still closely monitoring. In the case of the Minister of Finance and the Minister of Commerce, they want to discuss the inflation framework. The Governor of the BOT said that he was willing to discuss and that he had to be the one to meet with him. Source: Thai News Agency